New Clause 8 - Information about pensions

Pensions Bill [Lords] – in a Public Bill Committee at on 14 July 2011.

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‘The Secretary of State shall create a single place where all relevant information of pensions is available for employers and employees.’.—(Teresa Pearce.)

Brought up, read the First time, and Question proposed (this day), That the clause be read a Second time.

Question again proposed.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

Good afternoon, Miss Clark. We were discussing information about pensions for employers and employees, particularly in the context of auto-enrolment. As I said this morning, I very much welcome the opportunity to discuss these important questions. For reasons that I shall come to later, I am not sure that new clause 8 delivers what one would want, but the matters are none the less important and I am happy to address them.

For those who seek it, there certainly needs to be a place where people can find pensions information. The principal place for that is the Government’s website Directgov, which gives information about all pensions, both state and private, and includes signposting to other sources of information if necessary. However, I repeat what I said this morning: the problem with information is that people have to know that they want or need it, and they need to know where to go. It is not sufficient to make it available; we have to direct people to it, even tailoring information for the individual, rather than merely using websites for people to use online—if they know how to use them.

The hon. Member for Erith and Thamesmead and others properly asked what the Government are doing to ensure that people know more about pensions, particularly in the context of auto-enrolment. For employers, the principal duty will fall on the Pensions Regulator. It is the regulator that has the compliance duty. The regulator will alert firms 12 months before the staging date that they will have that duty in a year’s time, and will contact them again nearer the time. We are already working with the regulator, which is now talking to firms and testing materials.

We will supply the employer with templates and literature so that, for example, the small manufacturer mentioned this morning who does not want to be engaged in this will be able to download standard literature that can be sent to employees in fulfilment of that duty. Even though auto-enrolment is more than a  year away, the detailed guide that the regulator has already published on its website has been downloaded more than 20,000 times. I hope that is 20,000 firms rather than one person having trouble with his computer.

The idea is that the regulator will be proactive in communicating with firms. The regulator has an up and running telephone helpline for those with inquiries. Employers often ask what they should tell their employees. The Department for Work and Pensions is developing an information package that employers can make available to employees in the workplace, and we are doing some of that material on a range of employers. We are seized of the need to give firms good information.

We believe that individuals, too, need good information. The Government will be spending in the order of £10 million on communications. It will be done in stages. In the early stages, the emphasis will be on selling the notion of how important it is to save—not necessarily saving for pensions but sowing the seeds. We will start that work this autumn to get the idea into people’s minds. We shall be saying simple things such as, “You can probably expect to have 20 years in retirement.” We will not be saying, “You’re going to live until 97.23 years” or whatever it is; we want to give people a feel for it so that they say, “Twenty years in retirement? Gosh, is it as long as that?” We shall be saying that the basic pension will pay for the basics of life, but that if people want more they will have to save. We will be trying to communicate those simple messages.

In the new year, we will gradually build up the auto-enrolment link communications. It is a partnership. We have already heard of the excellent work being done by the National Employment Savings Trust through its website and its communications strategy. The private pensions industry will be doing the same. We will be working with the Pensions Regulator and undertaking work ourselves. Some of this will be done online. For example, if “pensions” is entered into Google it will not be my face that pops up but something far more enticing—information about auto-enrolment. [Interruption.] For a small fee, perhaps. It will be a web-based solution, after all.

The idea is that people will be directed to information. The point of the exercise in the build-up to auto-enrolment in summer 2012 and beyond is that there will be a cumulative effect. Obviously, a lot of the work force will not be able to enrol until some years later, so we have to target communication. We know the large firms that will be the first to be auto-enrolled and so can focus on them in our strategy.

Briefly, I flag a little-heralded organisation called TPAS—the Pensions Advisory Service—which, although I never thought I would say these words, could be regarded as part of the big society. It is Government-funded but also involves voluntary experts answering phone calls and helping with technical pensions questions. I visited TPAS recently and it is a superb organisation. I say to all hon. Members on the Committee that if constituents have a difficult pensions question, it is always worth giving them the phone number for TPAS, which can often give some very specific information.

I had a question about trivial commutation from a constituent and thought, “Oh my goodness, what shall I do?” I rang TPAS—I did not admit who I was—and it was brilliant. The chap on the phone said, “Yes, I know the chap who wrote the legislation, I will give him a  call,” and I quickly got the answer that I needed. I do not suppose someone would always get such service, but the general point is that we are working in partnership with TPAS and with the Money Advice Service, which is what the Consumer Financial Education Body or CFEB has now become. We are working in partnership with such organisations to provide what is called in the trade a seamless customer journey, by which we mean everything from expert help for people who have complex queries to basic information. We are putting money into call-centre capacity so that people have places to phone.

The strategy will be a mixture of general publicity and awareness about the need to save and tailored information, through the Pensions Regulator for employers, and NEST, the pensions industry and Government reaching out to individuals. In principle, the idea is fairly simple: many people do not have a pension, they need to save more for their old age and this is a scheme to overcome the hassle. Inevitably, however, if we are not careful, pensions can be complex. We have issued a leaflet this week about language, again echoing and complementary to some of NEST’s work on using simple language to communicate. So I absolutely accept the need for communication.

New clause 8 would give us a statutory duty to have one place for all the things that someone could ever possibly want to know about pensions, but even if we had that, we would not be satisfied because we do need to do a lot more as well. We do not want only to stick the information somewhere and say, “Go and find it.” We need to reach out to people and to be proactive, to help firms and individuals.

Photo of Lilian Greenwood Lilian Greenwood Opposition Assistant Whip (Commons)

I thank the Minister for setting out the strategy to ensure that people understand the importance of a pension and why they should be involved. What discussions has he had with the TUC or other unions? Often, in my experience, in the workplace people turn to their trade union for advice, and unions can be a good source of advice on pensions issues.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I have been struck by the engagement we have had with consumer groups, Which? and trade unions. Yesterday afternoon, I attended part of a meeting we had in the Department on communication strategy, and the TUC was represented. Obviously, we have entirely common interests in ensuring that trade union members and others are properly informed. I assure the hon. Member for Erith and Thamesmead that we want to make the system work, and we will co-operate with valued organisations such as trade unions to that effect. I welcome the chance to answer questions about the issues, which are important, and although a statutory duty of the sort described is not necessary, I thank the hon. Lady for moving the new clause.

Photo of Teresa Pearce Teresa Pearce Labour, Erith and Thamesmead

I am interested in what the Minister said, and we are clearly all speaking the same language. We want NEST to be a success, we want people to take part in it and we want it to be as simple as we hope it can be, in particular for small employers. The new system will be a challenge for them and if we hold their hand along the way, it should be more problem-free. With that in mind, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.